apple distribution
TRANSCRIPT
Distribution strategies are a major key to success, which are maximizing
sales and profits. Apple is utilizing from distribution strategies by using multiple channels,
especially including direct or semi-direct sales and different distribution channels for
different products. By pursuing this strategy, Apple increases its market coverage, lowers
channel cost and provides more customized selling.
Apple has 301 retail stores in ten countries and online stores serving to 36
countries where hardware and software products are sold. Moreover, it has 3000 retailers
and 320 large distributions. Apple has been slowly adding other distribution channels with
high sales volume. Selective distribution revealed itself at this point. A small number of
retail outlets are chosen to distribute the products. For instance AT&T, Best Buy and Wal-
Mart are selling Apple products in their stores. All of the phones require a new two-year
service agreement from AT&T or a qualified upgrade. AT&T is the only provider of the
iPhone in the US. The smartphone achieved big success in sales. But still AT&T was
criticized because the iPhone did not cover in major urban areas like New York City. Apple
also has its network of stores, which gives it a major advantage in distribution. Apple is
expanding and improving its distribution capabilities by opening its own retail stores in key
cities around the world. Apple provides Apple Mac-expert retail floor staff to selected
resellers' stores. It has entered into strategic alliances with other companies to co-brand or
distribute Apple's products and services. For example, HP is selling a co-branded form of
iPod and pre-loading iTunes onto consumer PCs and laptops.
Apple has also increased the accessibility of iPods through various resellers that
do not currently carry Apple Macintosh systems (such as Harvey Norman), and has
increased the reach of its online...
Apple Marketing Strategy
Apple has been so successful in these last years thanks to his fresh, imaginative way to think and do its
business: a winning combination of exceptional products, great style and design, great strategy, innovative
marketing, sleek and enticing communications.
Apple owes its overwhelming success in the last years to the iPhone and to the smart iPod and iTunes product
combination, a combination of a great hardware piece with great style, great software, great performance, user
friendly interface, with a good e-business service. The iPod + iTunes halo effect and new great Mac
computers and Mac OS software did the rest in increasing Apple revenue stream.
In the 5 years between 2003 to 2008 the Apple share value increased 25 times, from $7.5 to $180 per share.
At july 2008 prices, before the US Financial Crisis, Apple stock market capitalization was $160 billion.
In January 2010 Apple shares topped the $210 mark.
But even the best companies with the best products have bottleneck factors which often avoid full exploitation
of the opportunities.
The iPod.
Few people are aware - and few market analysts too - that for the first 3 years the iPod was an absolute flop.
The iPod was launched in october 2001, and between 2001 and 2004 iPod sales were between 100-200
thousand units per quarter, very far from today's 10-20 million units per quarter, and the iPod sales were not
even covering the product research & development costs.
Then, in June-Aug 2004 something happened, and iPod sales began to grow strongly, quarter after quarter.
Today, we all know where the iPod stands, and what a remarkable success it is.
The iPod made the fortune of Apple, and it stands out as the major turning point in the company growth.
Few people know that the iPod + iTunes business idea was not conceived inside Apple, but was proposed to
Apple by an outside source, a music lover and Engineer named Tony Fadell.
More on Tony Fadell and on the iPod marketing on iPod Marketing Strategy
The iPod marks another outstanding result in marketing:
the annihilation of competitors. To know more see the analysis on
The iPod competitors
It should be noted that, since the second generation of iPods in 2002, the iPods were made compatible not
only with the Mac operating systems but with Microsoft Windows operating systems as well.
We should ask ourselves (and to Steve Jobs): how many iPods would have been sold if the iPods would had
been compatible only with Mac operating systems?
Where the iPod is manufactured and assembled
The iPhone.
The pipeline of new products which came out from Apple in the last years is impressive, and overwhelming. In
2007, with the successful launch of the iPhone, Apple has marked another milestone in its development and
growth.
And moreover, the iPhone enters a market - the market of mobile phones - a market which is mature, and
saturated. Nonetheless, Apple has been able to develop a revolutionary product, and to change the paradigm
in the mobile phone market.
The iPhone is 5 years ahead of all its competitors. A wonderful product, amazing user interface, great design.
It is not only a mobile phone, it is a product between a mobile phone and a laptop computer. Even calling it a
smartphone is not enough.
In July 2008 Apple launched the second generation iPhone, the iPhone 3G.
The iPhone 3GS.
In June 2009 Apple launched its third generation iPhone: the iPhone 3GS.
The iPhone 3GS has a 3 megapixel autofocus camera, video recording and editing capabilities, voice control,
longer battery life, 7.2 Mbps HSDPA internet connection. iPhone 3GS is twice faster than the iPhone 3G. The
iPhone 3GS prices: $199 for the 16GB model, $299 for the 32GB model.
more on the new iPhone 3GS on the iPhone 3GS page.
More on iPhone Marketing on the iPhone Marketing Strategy page.
Apple did great. no doubt. However Apple has done some serious mistakes.
The most serious mistakes Apple has done concern marketing and distribution strategies in Europe.
Apple has overlooked the European markets, and missing big numbers in unexploited sales. With better
marketing strategy, better communication and distribution, Apple could have made 300% more revenues in
Europe in the last 4 years. Apple Marketing in Europe
We met with with Erik Stannow, Apple Vice President of Marketing for Europe & EMEA. We have been talking
with Erik Stannow about the marketing and distribution issues of Apple in the European markets and we gave
some valuable suggestions to improve the Apple marketing strategy and distribution in Europe.
Well, it seems that in Cupertino they don't care so much about Europe.
Steve Jobs
If we talk about Apple success, about Apple great products, we need to talk about Steve Jobs. Steve Jobs has
been and is the great mind behind all this.
Steve Jobs is a genius, he is a magician, too. He is the most skilled guy in introducing new products - "... one
more thing" - the most skilled in presenting the key features, and he is a great communicator.
Even more important, Steve Jobs has Vision. Vision in the strategy, Vision in the product development, Vision
in the alliances.
Apple Communication Strategy.
Apple communication is sober, intriguing, simple, clear, minimalist and clever. And it has a style of its own.
Both in the tv ads, both in print ads, both in the online communications. A lesson to be learned by many
companies in the world. Well, of course when you have great products it is much easier to entice the
costumers, but nevertheless doing it with style and cleverness is a very good point. It boosts sales, but
enhances the brand value too.
The famous "I am a Mac, I am a PC" tv ads are a milestone in communications. Smart, simple, effective and
humiliating (for Microsoft ...).
More on Apple Communications and on the Apple Commercials "I am a Mac I am a PC" on the Apple
Communication Strategy page.
Vertygo Team Ranking on Google
We are glad to announce that the Analysis Section of Vertygo Team has attained top ranking positions on the
Google Search Engine.
Vertygo Team ranks on Google as:
Nr.1 with the keywords Apple Marketing Strategy
Nr.1 with the keywords iPhone Marketing Strategy
Nr.2 with the keywords iPhone Marketing
More on Vertygo Team Ranking on Google
Cast Your Vote on Apple Products
If you wish you can cast your vote on Apple products, on the iPhone, on the iPod, on the iMac, about the
Apple Marketing Strategy.
vote using numbers from 1 to 10:
1 = poor 5 = medium 10 = great
If you don't want to vote on a certain product, or you do not have an opinion about it, simply leave the space
blank.
Apple DistributionDistribution
Apples upstream partners are the manufactures Foxconn Technology Group, which also
manufactures Apple's iPod, iPhone and Mac Min. It is headquartered in Tucheng, Taiwan
but it manufactures the Apple products in its largest plan in Shenzhen, China. However
Apple does not disclose the makers of its components, research shows that various parts
and suppliers include:
* Apple A4 SoC: Samsung.[13][98]
* NAND flash RAM chips: Toshiba; except Samsung for the 64 GB model.[99][100]
* Touch-screen chips: Broadcom.[99]
* IPS Display: LG Display
* Touch panels: Wintek. (Got the job after TPK Touch Solutions was unable to fulfill its
orders, delaying the iPad's release from late March to early April.[101])
* Case: Catcher Technologies.[102]
* LCD drivers: Novatek Microelectronics.[103]
* Batteries: 60% are made in Taiwan by Simplo Technology, 40% by Dynapack
International.[67][104]
* Accelerometer:
However Apple has many more downstream partners, even though it has its own personal
retailers with select Apple stores in various locations. Apple also takes advantage of the
many outside retailers to make sure its product is received by their consumers at
convenience. A few of their biggest retailers are the big technology suppliers like Best
Buy, Wal- Mart, Target, Radio Shack, and Sam’s. By doing this Apple is able to reach an
array of customers while also providing them the option to visit a specialty Apple store to
get the full effect and experience that the Apple Stores offer.
Apple’s channels of distribution are indirect marketing channels, containing one or more
intermediaries. Apple designs, manufactures, and markets smart personal devices
addressing the consumer electronics space through its online stores, its retail stores, its
direct sales force, and third-party wholesalers, resellers, and value-added resellers. Apple
now allows its largest distributors to provide all six models of the iPad...